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Mizuho boss vows reforms after loan scandal

Kyodo

The president of Mizuho Financial Group Inc. pledged Tuesday to improve corporate governance, including through the establishment of oversight committees, to prevent any more scandals involving loans to yakuza.

“We will try to regain the public’s trust through renewed efforts to sever ties with antisocial groups,” Yasuhiro Sato, president and chief executive officer of Mizuho Financial Group, said at a shareholders’ meeting in Tokyo.

“I deeply apologize for causing trouble and stirring concerns,” when the firm’s core banking unit Mizuho Bank lent money to gangsters through credit company Orient Corp.

The bank and the holding company were ordered last year by the Financial Services Agency to improve its business operations.

At the meeting, shareholders approved the firm’s plan to establish three committees that will be in charge of nominating executives, deciding on their pay and conducting audits. More than half the members of each committee will consist of external board members.

The company will be the first among the three major banking groups — Mizuho Financial Group, Sumitomo Mitsui Financial Group Inc. and Mitsubishi UFJ Financial Group Inc. — to adopt the committee system.

Among the Mizuho Financial Group’s 13 board members approved Tuesday, six are from outside the firm. Former economic and fiscal policy minister Hiroko Ota was appointed as chair of the board of directors.

The scandal over loans to gangsters came to light in late September when the FSA ordered Mizuho Bank to improve its operations, following an inspection that revealed the lender had failed to address the matter for more than two years after learning about it.

Mizuho Bank originally claimed its top management had not been aware of the issue, but it later admitted management had been informed of the issue at board and compliance meetings.

In December, the FSA ordered the “megabank” to suspend some of its affiliated loans and demanded the bank’s parent company, Mizuho Financial Group, improve its business operations.